what differentiates a superior investment manager from an inferior one?

Q: What is the chief disadvantage of ROI as an investmentcenter performance measure? How does the…

A:

Q: Explain the problems of adverse selection and moral hazard caused by asymmetric information. How can…

A: A financial institution is a corporation or person who acts as another go for different parties in…

Q: Why is it important for an investor to create a well-diversified investment portfolio? How should an…

A: Diversification is a methodology in which risk of the portfolio is reduced by distributing…

Q: Why is diversification considered “good” by most professionals? Can you think of a situation where…

A: Investment means engaging your funds to generate income for the future. Risk and return are two…

Q: What does the Law of Large Numbers tell us about investment managers’ performance? a. That great…

A: The large numbers theorem states that when the same experiment/study is repeated independently a…

Q: How does extent of rivalry among competitors affect the investment industry sector?

A: Here we are supposed to elaborate the degree to which the rivalry among the competitors affects the…

Q: What do you see as some of the possible problems if shareholder value is seen as a strategy (and not…

A: Strategy refers to the financial approach for the planning of the functions that are based on a…

Q: What are some advantages and disadvantages of top-down versus bottom-up investing styles?

A: Top-down investing and bottom up investing procedures are the procedures used in different type of…

Q: Why should a client provide their investment manager with an investment policy statement? Be…

A: Introduction : Investment advisers and financial advisors typically, but not always, use investment…

Q: How do profit potential and legal considerations affect a firm’scredit policy?

A: It refers to the policy which states interest rate and duration that are relevant to the funds…

Q: Why should a client provide their investment manager with an investment policy statement? Be…

A: Investment policy statement acts as a guideline for investment managers to construct and manage the…

Q: What is the process of evaluating any business investment decision?

A: Following are the steps of evaluating any business investment decision: Step 1: Ascertain the…

Q: Evaluation of the performance of an Investment center should only Include financial measures. True…

A: An investment centre is a business unit in a firm that can utilizes capital to contribute direct to…

Q: What information is considered a necessary evil in constructing an investment policy statement?

A: Provide appropriate guidance on portfolio construction and management Maintain focus on the…

Q: How behavorial bias affect investment behavior?

A: Behavioral bias is the belief by the investors that unknowingly affects the investors investment…

Q: What is risk, and how does it affect decisions about investment?

A: Risk and return are related to each other while making investment.

Q: What is the major shortcoming of using operating income as a performance measure for investment…

A: The company's aim will be to increase the profitability of the company. The profits can be arrived…

Q: What is the main drawback of using income from operations to measure the effectiveness of investment…

A: Introduction: Investment centers are firms that invest in other businesses to increase their…

Q: What goals might be persued by managers instead of maximization of shareholders wealth

A: Goals of financial management should be so articulated as to help achieve the objective of wealth…

Q: What is the main goal of the financial manager? How does the risk return trade-off relate to the…

A: For a given level of risk, there is a level of return. When the return from an investment rises,…

Q: Is maximizing shareholder value inconsistent with being socially responsible?Explain.

A: Maximizing the shareholder's value is the highest goal for any organization as they are the owners…

Q: How would you describe the services provided by the investment advisory firms and portfolio…

A: Investment advisory firms and portfolio management companies are the important parts of investment…

Q: How can Goodwill Industries capitalize on their strengths and how can they improve in their…

A: Goodwill is the brand reputation of a business. Goodwill help the business in operating the business…

Q: what does it mean to say that managers should maximize shareholders wealth subject to ethical…

A: Share- It is a unit of ownership in a company's capital. It entitles the shareholder to an equal…

Q: In what ways might using ROI as a performance indicator for investment centers lead to poor…

A: ROI: It measures the amount of return on a specific investment to the cost of the investment. The…

Q: Which of the following is NOT normally regarded as being a good reason to establish an ESOP?   a. To…

A: In the given question we are given 5 options and we are required to choose the correct option which…

Q: What can a person try to do to genuinely control spending to better achieve financial success?

A: Financial performance should be converted into a range of financial goals, properties, or net worth…

Q: What is the implication of managerial entrenchment: should company favor debt or equity? Why?

A: Managerial entrenchment theory-says that allotment of shares inside the organization such as…

Q: Why would managers misrepresent the financial results oftheir companies?

A: Fraud:   It is an intentional misappropriation of the assets or the financial records of an…

Q: What is the financial advantage (disadvantage) of accepting the outside supplier's offer?

A: Make or buy decision: It is the decision made by the company to manufacture the product or buy it…

Q: What is risk? Why must risk as well as return be considered by the financial manager who is…

A: Risk is associated with every business it is one of the important functions of the management to…

Q: What is the major shortcoming of using income from operations as a performance measure for…

A: Investment centre are who do investment of organisation to increase income.

Q: s it important to identify what costs will be eliminated in the conduct of finan

A: Turnaround recovery ways are a variety of measures that corporations use to get over a amount of a…

Q: What are the disadvantages of the financial intermediaries and the negative ways they can impact the…

A: A financial intermediary is that entity that acts as a middleman in a financial transaction taking…

Q: biases seriously affect investor's analysis and investment decisions? How

A: Behavioural biases are nothing but irrational behaviour or beliefs that can subconsciously affect…

Q: What is the major shortcoming of using income from operations as a performance measure for…

A: Investment center: A department or unit or division of a corporation where its manager is assigned…

Q: Why is financial leverage understood to be a fair-weather friend?

A: Financial leverage is a measure which shows a company's buying capacity of assets by using it's…